The company I work for pays me late. My employer paid me half of my pay check this past friday Nov. 18.......which is late, i should have gotten paid my full amount on Nov. 11. On the 18th, my boss said he's going to pay us the other half (my other two co-workers) on Monday the 21st. Bullshit, he didnt pay. The company sometimes pays on time but not always.
Are any of you guys experiencing this at the firm you work for? I know times are tough but I have bills and mouths to feed.
I already spoke to my boss about it 3 months ago and he gave me a bullshit story.
I dont know what to do. I've already looked up the California labor laws and I know my rights. Really, I dont want to go to the labor department because I dont want to cause any friction. By the way, this is my first job after being laid off in 2008 and it took me a long long time to find employment. I'm currently looking for another place to work.
I have 14 years of experience in the Architecture field and this is a first for me.
this is definitely not specific to architecture. i remember stories about this kind of thing from all kinds of businesses over the years. it's not *necessarily* a signal that the company is on the skids, but it's a safe bet. it may just be that they can't collect!
cashflow is a huge issue right now. accounts receivable logs are long, so even companies who have done the work and are owed the money aren't necessarily getting paid. if it comes down to paying the electric bill and paying the architect, what do you think clients do?
a lot of folks think this could be handled by the architects using liens, but if you've ever attempted this you'd realize how expensive even that can be for a firm. it's hard to squeeze money from those who don't have it, and that issue travels straight up the food chain.
all this is not meaning to defend your employer, however. it's a bad deal. if you have other options, pursue them.
If you have a good relationship with your employer, I suggest scheduling a talk with him, during which you must ask him to frankly explain what exactly the problem is, or you will be leaving. (He needs you to generate billable hours, so it's not like you don't have any value to him. Nobody likes to have to hire and train new workers, it's a time and money suck.) It may be simply that he's not great at asking clients to pay up when they are late. Often in small firms, there are limited cash reserves to help meet payroll when a client pays late - and with small firms, clients for some reason often feel like they can just not pay for a long time. If your boss is too nice with his clients (perhaps feeling like "if I make them mad, they'll leave" which is generally erroneous) he could be letting THEM pay late and thus forcing YOU to deal with the problem of a late paycheck.
If you can have a frank discussion with him, you can help diagnose the problem, and then offer to help. For example, in the problem outlined above, it might be easier for you to call the client yourself and say "you are X days late with your payment, and we must ask you to bring your account current before we continue work on your project". I've also seen it helpful to bring in the part-time office accountant and have him/her make these phone calls. It's usually helpful to have a 3rd party person do the calling - helps the boss avoid the conflict he's worried about, and also reminds the client that small business is still a legitimate business and client is in breach of contract by not paying.
IF this frank discussion proves unsatisfactory, then you only have two options:
1) call the department of labor. It's fairly easy. They will contact your employer, check out the situation, and give your employer 2 weeks to get current on payroll. Your employer will have to figure out how to do that by any means possible. (cash out 401k; borrow money from friends; sell his car; whatever.) This is definitely a nuclear option however. Boss shouldn't have hard feelings though - he should only be mad at himself/his clients. But still, might be difficult to continue working there after this.
2) if you don't want to do the above then you just have to figure out where the line is for you, between "I work here" and "I am just volunteering here". If it's too much of the latter for you to feel comfortable, then you might just need to leave. I've found that I can put up with late payment to a point, depending on the work, and depending on my own situation. That's a personal decision - only you can draw that line for yourself.
It may not mean that the company is going under, only that your boss is unable to manage his cash flow. I ran into this in my very first position in the field; the owner was clearly uncomfortable asking clients for money, so when he billed them and they didn't pay promptly, he wouldn't say anything. Worse than that, he'd let us keep working on the projects (as if they'd just forgotten and sending another bill would jog their memories). Either way, it doesn't bode well for the future if he actually has work but can't keep the fees coming in.
If this is a sudden thing (you didn't note how long you have been working there), this may be a result of slowdown during the winter weather (my experience is that smaller clients (I do a lot of residential renovation work these days) don't like to let go of money quite as promptly when there isn't work that they can see going on, so the time from billing to receipt tends to creep up when a project is not in construction). If this happens once in a while, its a problem but can be managed while maintaining a decent relationship with your boss. If it is becoming a chronic occurrence, however, or if he gets behind on more than one check, I would be far less forgiving, personally.
His story may not be total bs, but his management skills clearly are. Depending on how your relationship is with him, you might want to prepare a "bill" for him in the form of a letter on the date of your next pay period ending, noting how far in arrears he is and asking when you can expect to be paid in full for work you have already done. Only be aware that this will probably put you two in a highly adversarial position. Compassion for his position won't help you pay your bills, but it will keep you from rising to the top of the list if he has to scale down the workforce.
At a minimum, if you're going to be your employer's banker, you should receive interest on any and all late payments. Prime + 2% should be about right (prime's currently 3.25%)
There's just no excuse for an owner with enough work to justify employees not being able to manage its cashflow. Every firm has clients that pay late, but if your boss has been running the firm responsibly he should also have the ability to use a line of credit to bridge between payments. Assuming he has reasonable credit and a non-hostile relationship with his bank, this should be available with little more complication than showing an executed contract with future billings.
I have heard of this happening but only in terms of lore from the 1980s. Since this is your first job since 2008 I see your hesitation in starting conflict as valid. If your boss is known to you as a swindler then you have to take the steps to get your pay. If he is known to you as genuine then the comments made here may be valid. It could be a cash flow problem and he might not be getting paid. A boss in the good sense of the word just holds an account for you and provides a place for you to work. In exchange you sort of pay a fee to the boss for handling all the business expenses and a finders fee for bringing you your client. In that sense there isn't much a boss without cash reserves can do if the client won't pay. If you elect to cut your losses and terminate your boss you could be working on your own. I have found cash flow to be very tight and few new jobs come in from now until mid February and the same thing happens right around tax time. Meaning, by leaving the firm you could be the one responsible when the cash flow doesn't flow around this time. Best of luck and let's all hope we can make it though to better days ahead.
Nov 23, 11 3:01 pm ·
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Whoa! The craziest thing is that this thread implies that there are some architecture employees actually being paid. On time. In full. I'm shocked, yo!
Yes, its a cash flow problem and poor money manegment. My boss is trying to run two companies at the same time, his law practice and his architecture practice.
What i dont understand why he sent out the billing on the same week he is supposed to pay us.
Today, I asked him if we are getting paid and he said i'm working on it. I asked him what does that mean, he said, he's trying to get money from the clients. I told him that i need to get paid today nov. 23, (with the funds available) before 6pm because the banks close. I also told him banks are closed tomorrow. And his response was," are the banks open on friday"?
It isn't just employees. It goes all the way down the chain. I have a list of clients that have owed money for ages now, some over 2 years. Nothing you can do, really, if the money isn't there it isn't there (with so many companies going out of business, taking them to court won't matter if they file for bankruptcy, it'll just cost you).
So, you can push hard, threaten to quit, etc. All very reasonable responses. But also keep in mind that if there is not money coming from the clients, then there's not a lot you can do.
Only you can evaluate if this guy is really cash poor and clients are not paying (anyone running a business can give you a nice list of clients paying late, going bankrupt, etc.) or if this guy is just covering his own ass (which is his choice, of course, as it is his business).
As for the line of credit, I know of tons that had theirs pulled long ago, all with perfect credit, decent liquidity and substantial assets. Banks just don't want any risk, particularly if it is going to an ailing business. Times ain't what they were 3-4 years ago.
I'd ask him, if I were you, and decide how badly you need the job. Not much you can really do beyond that.
In the end, if someone doesn't want to pay, they won't. Contracts, etc., are only as good as the lawyers you have to back them up (sadly).
accounts receivable logs are long, so even companies who have done the work and are owed the money aren't necessarily getting paid.
I don't work in or even near architecture but this can be a huge issue. Most of the work I do usually has between a 15-45 day turnaround on pay and some of our subcontractors fail to realize that we will certainly pay them when the checks come in.
One such specific incident has been ongoing now for 2 months. Long story short, some things are held up in customs and my client's clients have been unable to get paid themselves because of a deal that's been temporarily stalled. It's caused a huge cash flow problem for everyone involved, including my client, and my client went from having operating cash reserves around $20,000-$25,000 to almost nothing as there was $12,000-$15,000 worth of work billed out on this failboat.
Unfortunately, I've yet to implement any sort of late payment charge or interest on invoices because I feel that it really can make business relationships messy since 95% of the time everything is mostly peachy. I would ask your boss to look into hiring a part-time bookkeeper or office manager. It could be that the boss simply has the money but fails to manage it correctly.
Also, one of my clients recently asked about looking into getting a line of credit for just these scenarios. The bank fees on such an arrangement were quite favorable and affordable. However, the the only two banks that would even consider it wanted the company to have $40,000+ a month in gross revenue.
It is a bummer at this point in time for alot of people. I would like to think if a person has employees they have the money in the bank to pay them. Being self employeed and working the job of a handful of people I only have to worry about what is coming thru the door to pay my bills. The last couple of years have been a zingger. We went into the recession pretty well positioned with some nice funded projects on the boards. So we didn't feel the pinch as early as many of our associates. We took an early look at where we were spending money and tightened our belts. You know not spend money on things we really didn't need to be spending monies on. We looked at all of our utilities, and said how can we back these things off. We did manage to save some money here and there. We didn't take a vacation this year, so that saved a few bucks. We parked one of our cars, (1984). in order to not have to pay insurance on it. Actually thinking hard about selling it for the few dollars we can get for it at this time. We paid down credit cards as quickly as possible. Today nothing goes on a credit card, unless we know it can be paid down in less than thirty days. You do all these things and yet it can be one or two clients who mess up all your efforts, and they are the guys who can go to the bank and get money. I have been working on a project since late last summer, where for one reason or another we have not been paid. I was sure we would have some money in our hands by this point in time but, it just hasn't happened. So today I was trying to figure out how to meet our December obligations. It is a shitty thing to have to think about over the Holidays, but it has to be done. Hopefully after Turkey Day, our bird will land so we can keep on keeping on. We also have one of those client who owes us a large sum of money, who is tied up in a Federal Civil Rights Case, who refuses to pay us at this time. Even if they win we might not get paid, which is kinda shitty cause the case is completly built around our work. We completed our work on this project four years ago, and it has been in the court system for almost three years.
I'm glad I'm not in a positon where I have to worry about have to be sure my employees are being paid at this point in time. If you boss has any scrupples, he should be able to lay it out on the table, he must have some sort of plan in hand. If he doesn't then you up the creek without a paddle. It could be a wild ride before it is over. Hopefully you can get unemployment if he lets you go because he can't pay you. Best of luck Dude!
Having been on both sides of this fence (several times), I'm compelled to respond.
As a principal, i let the last of my 2 employees go at the beginning of this year. In 25 years of practice, through several ups and downs, i have personally never witnessed what we are going through now.
Clients are slow to pay or simply hit their own wall and fade into the dust. As others have pointed out, it goes right down the food chain. Everyone seems stressed to the max these days.
I clearly explained to the two employees exactly where i were. Yes the work was there.....the money was not. Even while they were willing to stay on....I Personally believe i could not ask them to work without a firm plan in place for them getting paid. I offered introductions to colleagues who had the possibility of hiring them. this was simply the right thing to do in my mind.
Having said that: it sounds like the firm you are with, is not being upfront with you and doesn't seem to respect the idea you also have financial obligations. The writing appears to be on the wall. Just don't let it interfere with your Thanksgiving. Enjoy the holiday.
given the difficulty of getting clients to pay (noted above), does anyone ever require the money to be held in escrow as part of the contract? if payment is becoming more uncertain, will this start to occur? or are there good reasons that it does not occur?
End the relationship, now. You are on a slippery slope here; hoping to get paid and continuing to work there, it's a never ending cycle. Now, you could, and maybe I'd do this now, stay on and call the DOL. It'll throw a curve that he'd never expect. If you are thinking you can't collect unemployment insurance, don't worry about it, you can collect. You could ask for property in lieu of pay. Just a thought.
Nov 24, 11 5:03 pm ·
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"As for the line of credit, I know of tons that had theirs pulled long ago, all with perfect credit, decent liquidity and substantial assets. Banks just don't want any risk, particularly if it is going to an ailing business. Times ain't what they were 3-4 years ago."
This, in a nutshell, is exactly the crux of the problem at the core of the global financial collapse now taking place. Everybody needs & wants growth in the the economy in order to get out of the recession/depression that we are now in. Trouble is that growth is the expansion of credit...and right now there is no expansion of credit because banks are in far too vulnerable of a position to offer it. As credit shrinks, the money supply shrinks and this is the oil that literally keeps the economic engines running. Everything is seizing up right now and until the banks that should be failing are allowed to fail (instead of being propped up by government handouts) nothing will improve for anybody because the deception undermine the legitimacy of the entire system.
Here's a graphic (with link) to a seriously scary graph that illustrates the gravity of the situation:
Banks have been desperately trying to raise capital all year in order to meet their requirements and avoid collapse/bank runs/etc. but the situation keeps growing more dire each month. Without more capital (i.e., money in the bank) there can be no more credit and no more growth. Things are going to get worse before they get better.
2012 will not be a happy new year, if we even make it there, yo!
My experience: I am in my third month at my first job since graduation. I work in Seoul, Korea and several of my friends from school are from here and I spoke with them before I accepted the job offer. Several things like overtime and low wages were discussed, so I knew what to expect. Today is the second unpaid payday. I didn't expect not to get paid so late. I have student loans to pay off and I don't live with my parents (unlike most unmarried professionals here) so I need to pay rent. Everyone around me is not in an uproar, but that may just be the culture here. In a way, I sympathize because of the economic situation now. But there are two reasons why I am personally upset.
Most artistic bosses here come from family money, and I know that our principal plays golf (enormously expensive here) on the weekends and has a trust fund to fall back on. Meanwhile, most of the designers do not have this safety net.
Secondly, a partner asked me if we should hire additional people, and showed me their English resumes to briefly translate. This, in addition to hiring 3 new people after I was hired, upset me. You shouldn't hire people you can't afford.
jmanganelli - no, there won't be any escrow accounts or money up front because of a few reasons:
1. Architects have a "pay when paid/paid when paid" working method, so this is not the time to be making things more aggressive, no one would do it
2. Many projects require funding, which occurs after a project is moving forward. Even a single family home, most are going to be basing the construction off of loans or future earnings, not some big huge pile of cash.
Future - there will be more and more risk. There will be the "so you want to be part of the project, then I need you to work on a success-based fee structure".
This is a [possibly] good thing if you have the liquidity to keep afloat, if you don't, well, then...
As Yo! points out, credit is the key to the economy. Without it, Macy's won't have stocked shelves, a new car won't be bought and buildings will not be funded.
It is a catch-22 with what is going on right now. Banks (just being re-tested by the fed now) are the ones that need to lend, but they can't take on more risk with the tightened requirements.
Unfortunately, this stifles lending/credit, which, in turn, kills the economy and any growth. This is why companies/people can't get the lines of credit they used to to cover basic monthly expenses, even when the cash is technically on its way.
A vicious cycle and until credit loosens, we are all screwed.
Gov't - what we really need(ed) was strings attached to the billions that went to various banks. Also, further requirements on lending is killing any growth.
Big mess out there with no real cure in sight. With Congress and the Pres campaign, surely nothing will get done anytime soon.
So Friday should be payday again? Do you have "vacation" time saved up? If on the 2nd they haven't paid, just go on vacation, they are not paying you anyway, and look for a new job!
Dec 1, 11 4:43 pm ·
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A short primer on the shrinking money supply via John Carney at CNBC.com. You can read the full article outlining the current threat of deflation here:
"It’s easy to miss the contraction of the money supply because it involves a destruction of financial assets that we do not usually think of as “money” but that, in fact, operate as money — or did until relatively recently.
Within the banking system, however, other financial assets also serve as money. These assets can be used to meet margin calls, collateralize obligations, and make payments. U.S. Treasury bonds are the most obvious example of this kind of money-equivalent financial asset. The U.S. government recognizes the equivalence of Treasury bonds and dollars within the banking system by not requiring banks to hold any reserves against the bonds. They are counted as “cash or cash equivalents” on balance sheets of U.S. public companies.
Over in Europe, sovereign debt issued by euro zone nations also served as a money-equivalent inside the banking system. Banks were not required to hold reserves against sovereign debt. They used them as collateral for obligations, and made inter-bank payments with sovereign bonds. The bonds were, in short, as good as euros.
When the markets turned against nations like Greece and Italy, the cash-equivalency of their bonds came into doubt. It was obvious that they could lose value, and quite rapidly. The debt could no longer be used as collateral, except at extreme discounts.
The discounting of sovereign debt, then, meant that there was less money in the European banking system. If a one million euro bond previously held as a money-equivalent is now worth just 600,000 euros, the holder has lost 400,000 euros. Multiply that across the banking system, and you have millions of euros of money-equivalents simply vanishing.
It is exactly as if some paper-eating plague just started rotting physical euros. The money supply of Europe is vanishing."
Unfortunately, it is not just Europe's problem because American banks hold plenty of euro debt too. Deflation is brewing everywhere. Hold onto your cash (for now) and then buy low, yo!
Architect company paying employees late
Hi,
The company I work for pays me late. My employer paid me half of my pay check this past friday Nov. 18.......which is late, i should have gotten paid my full amount on Nov. 11. On the 18th, my boss said he's going to pay us the other half (my other two co-workers) on Monday the 21st. Bullshit, he didnt pay. The company sometimes pays on time but not always.
Are any of you guys experiencing this at the firm you work for? I know times are tough but I have bills and mouths to feed.
I already spoke to my boss about it 3 months ago and he gave me a bullshit story.
I dont know what to do. I've already looked up the California labor laws and I know my rights. Really, I dont want to go to the labor department because I dont want to cause any friction. By the way, this is my first job after being laid off in 2008 and it took me a long long time to find employment. I'm currently looking for another place to work.
I have 14 years of experience in the Architecture field and this is a first for me.
Suggestions welcomed.
golok
you boss is fucking you over right now...you might as well fuck him
Yup... Any firm without enough cash to make payroll is going teats up and you need to protect yourself.
this is definitely not specific to architecture. i remember stories about this kind of thing from all kinds of businesses over the years. it's not *necessarily* a signal that the company is on the skids, but it's a safe bet. it may just be that they can't collect!
cashflow is a huge issue right now. accounts receivable logs are long, so even companies who have done the work and are owed the money aren't necessarily getting paid. if it comes down to paying the electric bill and paying the architect, what do you think clients do?
a lot of folks think this could be handled by the architects using liens, but if you've ever attempted this you'd realize how expensive even that can be for a firm. it's hard to squeeze money from those who don't have it, and that issue travels straight up the food chain.
all this is not meaning to defend your employer, however. it's a bad deal. if you have other options, pursue them.
If you have a good relationship with your employer, I suggest scheduling a talk with him, during which you must ask him to frankly explain what exactly the problem is, or you will be leaving. (He needs you to generate billable hours, so it's not like you don't have any value to him. Nobody likes to have to hire and train new workers, it's a time and money suck.) It may be simply that he's not great at asking clients to pay up when they are late. Often in small firms, there are limited cash reserves to help meet payroll when a client pays late - and with small firms, clients for some reason often feel like they can just not pay for a long time. If your boss is too nice with his clients (perhaps feeling like "if I make them mad, they'll leave" which is generally erroneous) he could be letting THEM pay late and thus forcing YOU to deal with the problem of a late paycheck.
If you can have a frank discussion with him, you can help diagnose the problem, and then offer to help. For example, in the problem outlined above, it might be easier for you to call the client yourself and say "you are X days late with your payment, and we must ask you to bring your account current before we continue work on your project". I've also seen it helpful to bring in the part-time office accountant and have him/her make these phone calls. It's usually helpful to have a 3rd party person do the calling - helps the boss avoid the conflict he's worried about, and also reminds the client that small business is still a legitimate business and client is in breach of contract by not paying.
IF this frank discussion proves unsatisfactory, then you only have two options:
1) call the department of labor. It's fairly easy. They will contact your employer, check out the situation, and give your employer 2 weeks to get current on payroll. Your employer will have to figure out how to do that by any means possible. (cash out 401k; borrow money from friends; sell his car; whatever.) This is definitely a nuclear option however. Boss shouldn't have hard feelings though - he should only be mad at himself/his clients. But still, might be difficult to continue working there after this.
2) if you don't want to do the above then you just have to figure out where the line is for you, between "I work here" and "I am just volunteering here". If it's too much of the latter for you to feel comfortable, then you might just need to leave. I've found that I can put up with late payment to a point, depending on the work, and depending on my own situation. That's a personal decision - only you can draw that line for yourself.
It may not mean that the company is going under, only that your boss is unable to manage his cash flow. I ran into this in my very first position in the field; the owner was clearly uncomfortable asking clients for money, so when he billed them and they didn't pay promptly, he wouldn't say anything. Worse than that, he'd let us keep working on the projects (as if they'd just forgotten and sending another bill would jog their memories). Either way, it doesn't bode well for the future if he actually has work but can't keep the fees coming in.
If this is a sudden thing (you didn't note how long you have been working there), this may be a result of slowdown during the winter weather (my experience is that smaller clients (I do a lot of residential renovation work these days) don't like to let go of money quite as promptly when there isn't work that they can see going on, so the time from billing to receipt tends to creep up when a project is not in construction). If this happens once in a while, its a problem but can be managed while maintaining a decent relationship with your boss. If it is becoming a chronic occurrence, however, or if he gets behind on more than one check, I would be far less forgiving, personally.
His story may not be total bs, but his management skills clearly are. Depending on how your relationship is with him, you might want to prepare a "bill" for him in the form of a letter on the date of your next pay period ending, noting how far in arrears he is and asking when you can expect to be paid in full for work you have already done. Only be aware that this will probably put you two in a highly adversarial position. Compassion for his position won't help you pay your bills, but it will keep you from rising to the top of the list if he has to scale down the workforce.
Best luck
Keep looking for a new position and good luck.
At a minimum, if you're going to be your employer's banker, you should receive interest on any and all late payments. Prime + 2% should be about right (prime's currently 3.25%)
1. definitely contact DOL.
2. how big is said firm and can you out them?
Good coments above.
There's just no excuse for an owner with enough work to justify employees not being able to manage its cashflow. Every firm has clients that pay late, but if your boss has been running the firm responsibly he should also have the ability to use a line of credit to bridge between payments. Assuming he has reasonable credit and a non-hostile relationship with his bank, this should be available with little more complication than showing an executed contract with future billings.
I have heard of this happening but only in terms of lore from the 1980s. Since this is your first job since 2008 I see your hesitation in starting conflict as valid. If your boss is known to you as a swindler then you have to take the steps to get your pay. If he is known to you as genuine then the comments made here may be valid. It could be a cash flow problem and he might not be getting paid. A boss in the good sense of the word just holds an account for you and provides a place for you to work. In exchange you sort of pay a fee to the boss for handling all the business expenses and a finders fee for bringing you your client. In that sense there isn't much a boss without cash reserves can do if the client won't pay. If you elect to cut your losses and terminate your boss you could be working on your own. I have found cash flow to be very tight and few new jobs come in from now until mid February and the same thing happens right around tax time. Meaning, by leaving the firm you could be the one responsible when the cash flow doesn't flow around this time. Best of luck and let's all hope we can make it though to better days ahead.
Whoa! The craziest thing is that this thread implies that there are some architecture employees actually being paid. On time. In full. I'm shocked, yo!
Hi guys, thanks for the comments.
Yes, its a cash flow problem and poor money manegment. My boss is trying to run two companies at the same time, his law practice and his architecture practice.
What i dont understand why he sent out the billing on the same week he is supposed to pay us.
Today, I asked him if we are getting paid and he said i'm working on it. I asked him what does that mean, he said, he's trying to get money from the clients. I told him that i need to get paid today nov. 23, (with the funds available) before 6pm because the banks close. I also told him banks are closed tomorrow. And his response was," are the banks open on friday"?
FUCK YOU!!!
sorry, i had to get that out.
Welcome to the new economy.
Working for a lawyer is not without risks.
Yes, welcome to the new normal.
It isn't just employees. It goes all the way down the chain. I have a list of clients that have owed money for ages now, some over 2 years. Nothing you can do, really, if the money isn't there it isn't there (with so many companies going out of business, taking them to court won't matter if they file for bankruptcy, it'll just cost you).
So, you can push hard, threaten to quit, etc. All very reasonable responses. But also keep in mind that if there is not money coming from the clients, then there's not a lot you can do.
Only you can evaluate if this guy is really cash poor and clients are not paying (anyone running a business can give you a nice list of clients paying late, going bankrupt, etc.) or if this guy is just covering his own ass (which is his choice, of course, as it is his business).
As for the line of credit, I know of tons that had theirs pulled long ago, all with perfect credit, decent liquidity and substantial assets. Banks just don't want any risk, particularly if it is going to an ailing business. Times ain't what they were 3-4 years ago.
I'd ask him, if I were you, and decide how badly you need the job. Not much you can really do beyond that.
In the end, if someone doesn't want to pay, they won't. Contracts, etc., are only as good as the lawyers you have to back them up (sadly).
accounts receivable logs are long, so even companies who have done the work and are owed the money aren't necessarily getting paid.
I don't work in or even near architecture but this can be a huge issue. Most of the work I do usually has between a 15-45 day turnaround on pay and some of our subcontractors fail to realize that we will certainly pay them when the checks come in.
One such specific incident has been ongoing now for 2 months. Long story short, some things are held up in customs and my client's clients have been unable to get paid themselves because of a deal that's been temporarily stalled. It's caused a huge cash flow problem for everyone involved, including my client, and my client went from having operating cash reserves around $20,000-$25,000 to almost nothing as there was $12,000-$15,000 worth of work billed out on this failboat.
Unfortunately, I've yet to implement any sort of late payment charge or interest on invoices because I feel that it really can make business relationships messy since 95% of the time everything is mostly peachy. I would ask your boss to look into hiring a part-time bookkeeper or office manager. It could be that the boss simply has the money but fails to manage it correctly.
Also, one of my clients recently asked about looking into getting a line of credit for just these scenarios. The bank fees on such an arrangement were quite favorable and affordable. However, the the only two banks that would even consider it wanted the company to have $40,000+ a month in gross revenue.
It is a bummer at this point in time for alot of people. I would like to think if a person has employees they have the money in the bank to pay them. Being self employeed and working the job of a handful of people I only have to worry about what is coming thru the door to pay my bills. The last couple of years have been a zingger. We went into the recession pretty well positioned with some nice funded projects on the boards. So we didn't feel the pinch as early as many of our associates. We took an early look at where we were spending money and tightened our belts. You know not spend money on things we really didn't need to be spending monies on. We looked at all of our utilities, and said how can we back these things off. We did manage to save some money here and there. We didn't take a vacation this year, so that saved a few bucks. We parked one of our cars, (1984). in order to not have to pay insurance on it. Actually thinking hard about selling it for the few dollars we can get for it at this time. We paid down credit cards as quickly as possible. Today nothing goes on a credit card, unless we know it can be paid down in less than thirty days. You do all these things and yet it can be one or two clients who mess up all your efforts, and they are the guys who can go to the bank and get money. I have been working on a project since late last summer, where for one reason or another we have not been paid. I was sure we would have some money in our hands by this point in time but, it just hasn't happened. So today I was trying to figure out how to meet our December obligations. It is a shitty thing to have to think about over the Holidays, but it has to be done. Hopefully after Turkey Day, our bird will land so we can keep on keeping on. We also have one of those client who owes us a large sum of money, who is tied up in a Federal Civil Rights Case, who refuses to pay us at this time. Even if they win we might not get paid, which is kinda shitty cause the case is completly built around our work. We completed our work on this project four years ago, and it has been in the court system for almost three years.
I'm glad I'm not in a positon where I have to worry about have to be sure my employees are being paid at this point in time. If you boss has any scrupples, he should be able to lay it out on the table, he must have some sort of plan in hand. If he doesn't then you up the creek without a paddle. It could be a wild ride before it is over. Hopefully you can get unemployment if he lets you go because he can't pay you. Best of luck Dude!
Having been on both sides of this fence (several times), I'm compelled to respond.
As a principal, i let the last of my 2 employees go at the beginning of this year. In 25 years of practice, through several ups and downs, i have personally never witnessed what we are going through now.
Clients are slow to pay or simply hit their own wall and fade into the dust. As others have pointed out, it goes right down the food chain. Everyone seems stressed to the max these days.
I clearly explained to the two employees exactly where i were. Yes the work was there.....the money was not. Even while they were willing to stay on....I Personally believe i could not ask them to work without a firm plan in place for them getting paid. I offered introductions to colleagues who had the possibility of hiring them. this was simply the right thing to do in my mind.
Having said that: it sounds like the firm you are with, is not being upfront with you and doesn't seem to respect the idea you also have financial obligations. The writing appears to be on the wall. Just don't let it interfere with your Thanksgiving. Enjoy the holiday.
given the difficulty of getting clients to pay (noted above), does anyone ever require the money to be held in escrow as part of the contract? if payment is becoming more uncertain, will this start to occur? or are there good reasons that it does not occur?
End the relationship, now. You are on a slippery slope here; hoping to get paid and continuing to work there, it's a never ending cycle. Now, you could, and maybe I'd do this now, stay on and call the DOL. It'll throw a curve that he'd never expect. If you are thinking you can't collect unemployment insurance, don't worry about it, you can collect. You could ask for property in lieu of pay. Just a thought.
"As for the line of credit, I know of tons that had theirs pulled long ago, all with perfect credit, decent liquidity and substantial assets. Banks just don't want any risk, particularly if it is going to an ailing business. Times ain't what they were 3-4 years ago."
This, in a nutshell, is exactly the crux of the problem at the core of the global financial collapse now taking place. Everybody needs & wants growth in the the economy in order to get out of the recession/depression that we are now in. Trouble is that growth is the expansion of credit...and right now there is no expansion of credit because banks are in far too vulnerable of a position to offer it. As credit shrinks, the money supply shrinks and this is the oil that literally keeps the economic engines running. Everything is seizing up right now and until the banks that should be failing are allowed to fail (instead of being propped up by government handouts) nothing will improve for anybody because the deception undermine the legitimacy of the entire system.
Here's a graphic (with link) to a seriously scary graph that illustrates the gravity of the situation:
Banks have been desperately trying to raise capital all year in order to meet their requirements and avoid collapse/bank runs/etc. but the situation keeps growing more dire each month. Without more capital (i.e., money in the bank) there can be no more credit and no more growth. Things are going to get worse before they get better.
2012 will not be a happy new year, if we even make it there, yo!
My experience: I am in my third month at my first job since graduation. I work in Seoul, Korea and several of my friends from school are from here and I spoke with them before I accepted the job offer. Several things like overtime and low wages were discussed, so I knew what to expect. Today is the second unpaid payday. I didn't expect not to get paid so late. I have student loans to pay off and I don't live with my parents (unlike most unmarried professionals here) so I need to pay rent. Everyone around me is not in an uproar, but that may just be the culture here. In a way, I sympathize because of the economic situation now. But there are two reasons why I am personally upset.
Most artistic bosses here come from family money, and I know that our principal plays golf (enormously expensive here) on the weekends and has a trust fund to fall back on. Meanwhile, most of the designers do not have this safety net.
Secondly, a partner asked me if we should hire additional people, and showed me their English resumes to briefly translate. This, in addition to hiring 3 new people after I was hired, upset me. You shouldn't hire people you can't afford.
jmanganelli - no, there won't be any escrow accounts or money up front because of a few reasons:
1. Architects have a "pay when paid/paid when paid" working method, so this is not the time to be making things more aggressive, no one would do it
2. Many projects require funding, which occurs after a project is moving forward. Even a single family home, most are going to be basing the construction off of loans or future earnings, not some big huge pile of cash.
Future - there will be more and more risk. There will be the "so you want to be part of the project, then I need you to work on a success-based fee structure".
This is a [possibly] good thing if you have the liquidity to keep afloat, if you don't, well, then...
As Yo! points out, credit is the key to the economy. Without it, Macy's won't have stocked shelves, a new car won't be bought and buildings will not be funded.
It is a catch-22 with what is going on right now. Banks (just being re-tested by the fed now) are the ones that need to lend, but they can't take on more risk with the tightened requirements.
Unfortunately, this stifles lending/credit, which, in turn, kills the economy and any growth. This is why companies/people can't get the lines of credit they used to to cover basic monthly expenses, even when the cash is technically on its way.
A vicious cycle and until credit loosens, we are all screwed.
Gov't - what we really need(ed) was strings attached to the billions that went to various banks. Also, further requirements on lending is killing any growth.
Big mess out there with no real cure in sight. With Congress and the Pres campaign, surely nothing will get done anytime soon.
"What we really need(ed) was strings attached to the billions that went to various banks".
NAIL. ON. THE. HEAD.
You should ask your boss for some vaseline while you're at it.
If it were me, I'd be out of that shithole the second they were late paying me. Fuck him.
The Bank Bailout Was Actually $8 Trillion
So Friday should be payday again? Do you have "vacation" time saved up? If on the 2nd they haven't paid, just go on vacation, they are not paying you anyway, and look for a new job!
A short primer on the shrinking money supply via John Carney at CNBC.com. You can read the full article outlining the current threat of deflation here:
"It’s easy to miss the contraction of the money supply because it involves a destruction of financial assets that we do not usually think of as “money” but that, in fact, operate as money — or did until relatively recently.
Within the banking system, however, other financial assets also serve as money. These assets can be used to meet margin calls, collateralize obligations, and make payments. U.S. Treasury bonds are the most obvious example of this kind of money-equivalent financial asset. The U.S. government recognizes the equivalence of Treasury bonds and dollars within the banking system by not requiring banks to hold any reserves against the bonds. They are counted as “cash or cash equivalents” on balance sheets of U.S. public companies.
Over in Europe, sovereign debt issued by euro zone nations also served as a money-equivalent inside the banking system. Banks were not required to hold reserves against sovereign debt. They used them as collateral for obligations, and made inter-bank payments with sovereign bonds. The bonds were, in short, as good as euros.
When the markets turned against nations like Greece and Italy, the cash-equivalency of their bonds came into doubt. It was obvious that they could lose value, and quite rapidly. The debt could no longer be used as collateral, except at extreme discounts.
The discounting of sovereign debt, then, meant that there was less money in the European banking system. If a one million euro bond previously held as a money-equivalent is now worth just 600,000 euros, the holder has lost 400,000 euros. Multiply that across the banking system, and you have millions of euros of money-equivalents simply vanishing.
It is exactly as if some paper-eating plague just started rotting physical euros. The money supply of Europe is vanishing."
Unfortunately, it is not just Europe's problem because American banks hold plenty of euro debt too. Deflation is brewing everywhere. Hold onto your cash (for now) and then buy low, yo!
We'll see, numbers out yesterday and Th were fairly encouraging.
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